MINERGY, a coal development firm operating in Botswana's Mmamabula coalfields, has decided not to list in Johannesburg, preferring instead a more expensive UK listing owing to negative sentiment regarding South Africa.

Andre Bojé, CEO of Minergy, said that while there was no specific risk posed to the company's business by potential regulatory change in South Africa's mining industry, shareholders were nonetheless uneasy at the prospect of a Johannesburg listing.

"It shows you how investment feeling about South Africa has turned negative," said Bojé, previously founder and CEO of the Johannesburg-listed coal miner, Wescoal Holdings.

"It is more expensive to list in London, but we will raise a small amount of cash to cover the listing costs. We can always do a fast-track listing in Johannesburg once we have an established presence in the UK," he said. Minergy is primarily listed on the Botswana Stock Exchange, but liquidity is low in that market.

There was also a lot of familiarity and comfort among UK investors in Africa (non-South African) mining investments, said Bojé.
Bojé said Botswana-based pension funds were likely to take more shares for cash in Minergy imminently. This would raise about P60m equal to R78m and take total funds raised to some P135m (R175m) – enough to build Minergy's Masama thermal coal mine. The mine would have saleable coal of about 1.2 million tonnes a year.

Most of the thermal coal production would be exported to South African industrial consumers in North West province and the Western Cape where Minergy had a competitive advantage in terms of freight costs.

Bojé was appointed to lead Minergy's development work at Masama in 2016 by Minergy executive director, Claude de Bruin, a South African investor based in Australia. Bojé's remit was to give focus to Masama's the footprint of which was originally estimated to be some 700 square kilometres with an estimated 2.8 billion tonnes of export quality coal.

Although scoped down from that level, the resource was still large enough to eventually supply multiple markets. "The size of the resource also supports scalable production, presenting an opportunity to provide export coal to traders who supply India, China, and other areas of Asia, as well as Europe, should international coal prices remain stable," said Minergy in a press statement last week.

Shares in Minergy Limited were listed on the Botswana Stock Exchange (BSE) following the raising of BWP72-million through a private placement.

The shares were listed to raise development funding for the company's wholly owned subsidiary, Minergy Coal who owns the Masama Coal Resource, located in the south-western corner of Botswana's Mmamabula coalfield. Minergy plans to build an opencast coal mine with the potential to produce 2.4Mtpa within 16 to 18 months of the BSE listing. The company will focus on delivering high quality coal to the regional market, including Botswana and South Africa, and possibly the export market.

Minergy CEO, Andre Boje, accompanied by Minergy chairman Mokwena Morulane, CFO Morné du Plessis and members of the board of directors and executive management to the listing function, and marked the occasion as "a great day for Minergy which marks the beginnings of a resurgence in the Botswana coal industry". They added that Minergy will be the second producer in Botswana. Plus, Boje said that Minergy would collaborate with "together with government and other industry players, to address the logistical challenges facing the coal industry in Botswana".

"We are pleased to be listing on the Botswana Stock Exchange, we are in good company, and as a responsible corporate citizen, we are committed to skills development and training and giving back to the communities in which we operate," said Boje. The company has further plans to list on the JSE in the latter half of 2017 or early 2018.
In the initial capital raising, BWP72-million was raised by means of private placement. The total investment needed to develop the 347Mt high-quality coal resource covering 120km will be in the region of BWP200-million.
Boje says an investment in the company offers shareholders an opportunity to invest in an anticipated cash generative coal mining operation which presents a platform for additional growth and creation of shareholder value. "Assessments of the Masama Coal Project completed to date indicate that it will be capable of generating commercially attractive returns which would enable the company to pay attractive dividends."

Boje says coal will continue to play a significant role in delivering energy access and security for a long time to come. "The International Energy Agency forecasts that coal will remain the largest single source of electricity generation until 2040. Coal still makes up 41% of global electricity generation and 29% of primary energy demand," adds Boje. Against this background, and given the fact that the Masama coal reserve can be mined at low cost and low risk, it offers investors the potential of attractive returns and future expansion opportunities in foreign based earnings.

Minergy's low cost competitive advantage lies in its shallow coal seams which allow extraction through opencast method at low strip ratios which will more than make up for any potential logistical disadvantages.
The Masama Coal Mine is expected to generate significant free cash flow. This should present an opportunity to pay attractive dividends once the company is profitable and generates the required free cash flow. It will also enable the company to consider various opportunities for growth in the future.

"We expect that all Environmental Impact Assessments, feasibility studies and the approval of our mining license will be in place by the second quarter of 2018, with production commencing in 2018," Boje says.
The listing of Minergy and the development of the Masama Coal Project hold significant benefits for Botswana. "Management have appointed local managers and board members and job creation in Botswana will be significant. In addition, the listing on the Botswana Stock Exchange means that the people of Botswana will have another option into which to invest directly," Boje concludes.

Coal and energy company Minergy listed on the Botswana Stock Exchange (BSE) last week, following the raising of P72-million through a private placement. The shares were listed to raise development funding for the company's wholly-owned subsidiary, Minergy Coal, which owns the Masama coal resource in...read more

Minergy Limited has started trading on the Botswana Stock Exchange (BSE) with a total of 376 024 867 ordinary shares valued at P1 per share.

Speaking at the listing ceremony held at BSE premises, Minergy chairperson, Mr Mokwena Morulane said shares were listed to raise funds for the development of Masama Mine, located in the southern part of Botswana's Mmamabula coalfield.

Mr Morulane said they planned to build an opencast coal mine with the potential to produce 2.4 Mtpa within 16 to 18 months of BSE listing.

The chairperson said Botswana had a potential of being a leader in coal mining, but the industry remained undeveloped although there were huge reserves.

Although the mining company was relatively new, Mr Morulane said they had assembled an experienced management team. He further said the company was committed to skills development, adding that through the mine they would also be addressing challenges of unemployment.

Masama Mine is to be situated on the southern edge of Mmamabula coalfields, where there are already railway and road infrastructure. Mr Morulane said they would have a low cost, open cast mine as ore was close to the surface. An investment in the mining company through purchasing of listed shares gives investors an opportunity to invest in anticipated cash generating coal mining operation, which presents a platform for further growth and creation of shareholder value.

The company's Pre Listing Statement states that a subsidiary of Minergy Limited named Storm Ahead Trade and Invest, has been established to trade coal regionally. It is stated that the company is well positioned to take advantage of regional and international market trends by focusing on the 18 to 20 million tonnes per annum regional coal market with future expansion to international markets. Through the listing, the company aims to raise further development funding and it needs P200 million to develop the 347 million tonnes of high quality coal resource covering 120 square kilometres.

Another reason to list was to establish a platform for the future raising of development to realise the company's growth plans. The listing also raises the regional profile of the company and also this makes it a more attractive investment opportunity for market participants and investors.

Company chief executive officer, Mr Andre Boje said they planned to list in the JSE and added that through his company, Botswana would be able to export power to South Africa.

The listing by Minergy now means total market capitalisation, or value of the stock market, additional P377 million. Before the listing, the market was valued at P420 billion with listed mining companies contributing P355.6 billion. ENDS

Minergy Limited revealed today that expect to start coal mining about 50km from Gaborone in Medie, a small village not far from Botswana's business district in an effort to exploit coal deposits of a staggering 347 million tones and a mine life of 80 years with a capital injection of P72million.

Mining is projected to begin in July 2018 if relevant regulatory approval is given and 1000 direct jobs are expected to be created as Botswana endeavours to become a coal exporter to regional giant South Africa which like Botswana faces challenges of access to power resources.

"We are first coal focused company to be listed on the main BSE board and later on in the year we want to do another listing on the JSE to be a dual listed company," said Andre Boje, Chief Executive Officer of Minergy. He said, "There has been a lot of talk about Botswana's coal deposits but no one has done anything about it. We plan to change that narrative."

Minergy plans to build an opencast coal mine with the potential to produce 2,4 Mtpa within 16 -18 months of the BSE listing. The company will focus on delivering high quality coal to the regional market, including Botswana and South Africa, and possibly the export market targeting countries like India, China and Europe. A buoyant Boje maintained that "together with government and other industry players, Minergy will look to address the logistical challenges facing the coal industry in Botswana."

"We are pleased to be listing on the Botswana Stock Exchange, we are in good company, and as a responsible corporate citizen, we are committed to skills development and training and giving back to the communities in which we operate." The company has further plans to list on the JSE in the latter half of 2017 or early 2018. In the initial capital raising, BWP72 million was raised by means of private placement.The total investment needed to develop the 347 Mt high-quality coal resource covering 120km2 will be in the region of BWP200 million. Boje says an investment in the company offers shareholders an opportunity to invest in an anticipated cash generative coal mining operation which presents a platform for further growth and creation of shareholder value. "Assessments of the Masama Coal Project completed to date indicate that it will be capable of generating commercially attractive returns which would enable the company to pay attractive dividends."

Boje says coal will continue to play a major role in delivering energy access and security for a long time to come. "The International Energy Agency forecasts that coal will remain the largest single source of electricity generation until 2040. Coal still makes up 41% of global electricity generation and 29% of primary energy demand," Boje said. Against this background, and given the fact that the Masama coal reserve can be mined at low cost and low risk, it offers investors the potential of attractive returns and future expansion opportunities in foreign based earnings. Minergy's low cost competitive advantage lies in its shallow coal seams which allow extraction through opencast method at low strip ratios which will more than make up for any potential logistics disadvantages.

This should present an opportunity to pay attractive dividends once the company is profitable and generates the required free cash flow. It will also enable the company to consider various opportunities for growth in the future. "We expect that all Environmental Impact Assessments, feasibility studies and the approval of our mining license will be in place by the second quarter of 2018, with production commencing in 2018," Boje says. The listing of Minergy and the development of the Masama Coal Project hold significant benefits for Botswana with management appointing local managers and board members.

Speaking for the Botswana Stock Exchange Market Development Manager Thapelo Moribame maintained that the BSE Strategy for 2017 – 2021 is to increase ratio of the BSE's market Capitalization to GDP from 34% to 40% by 2021 and increase local companies on BSE from 24 to 30 by 2021. "So far in 2017, we held another successful Conference to groom companies to list and since then we have had 2 corporate bonds listing. This is testimony that the BSE as a viable platform for businesses to raise capital," said Moribame.

Currently there are thirty-three(33) companies listed on the BSE. Twenty-three (23) of these are listed on the domestic board while ten (10) are on the foreign board. There are also four (4) ETF's and forty-two (42) bonds listed on the BSE. There are eight (8) mining companies currently listed on the bourse. These had a market capitalization of P355.6 Billion out of the total market cap of P420.4 Billion. The Minergy listing is expected to add an extra P376 Million to the BSE's market capitalization.